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Footsie eases after hitting four-year high

Britain's leading share index eased a touch yesterday, stalling after a recent push up to its highest level in four-and-a-half years, weighed by falls in financials and mining stocks.

Banks were the biggest sector fallers, knocking more than four points off the FTSE-100, with traders citing profit-taking after recent gains, and caution over a report that several German banks had been asked to simulate a split of their investment banking operations.

Insurers were also weak, led by Standard Life, down 0.8 % as UBS downgraded it to sell from neutral in a UK life and general insurance review. UBS made the same downgrade on mid cap Phoenix Group, off 2.1%, citing valuation grounds for both.

Among weaker miners, Mexican silver miner Fresnillo was the biggest FTSE-100 percentage-faller, shedding 2.8% after a fourth-quarter production report, with some analysts citing concerns over a potential mining royalty in Mexico.

At the close, the FTSE-100 index was down 1.81 points, or 0.03% at 6179.17 points, retreating after having hit a fresh 2013 peak at 6184.02 in early trade.

News of a move by Credit Suisse to reduce its strategy allocation in UK equities also weighed on the London market.

"The FTSE-100 is a defensive market - and thus tends to underperform when economic lead indicators and global equity markets rise," Credit Suisse said in a global strategy review.

But the Swiss bank retained its "overweight" stance on the London market, seeing opportunities in real estate stocks and cheap international earners, such as Smiths Group and Shire. Smiths added 1.7%, Shire 0.8%.

Other stocks perceived as defensive provided the main underlying strength for the market, with drinks groups and food producers standing out.

Food ingredients group Tate Lyle gained 1.5% with traders citing the impact of an upgrade in rating to buy from hold by Berenberg Bank, which said the stock was the most undervalued in its sector.

Retailer Kingfisher was a good FTSE-100 gainer, up 1.5%, rallying after recent falls supported by a 9% price target hike by Exane BNP Paribas to 350 pence, in an upbeat review of UK retailers, with the bank forecasting new share buybacks by the DIY stores group.

Exane also upgraded its rating for clothing retailer Next, to neutral from underperform. Next added 1.5%.

Online grocer Ocado was the top FTSE-350 riser, up 6.3% on news Stuart Rose, one of Britain's best-known retail bosses, is to be chairman of the currently loss-making business.

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